“We are very encouraged by pricing trends across all three business segments. Renewal rate change in Business Insurance was approximately 8%, up from nearly 6% in the fourth quarter of last year and consistent with recent quarters. Renewal rate change in Financial, Professional and International Insurance improved to 4%, and we once again achieved double-digit pricing improvements in Personal Insurance.
“Given the continued low interest rate environment and uncertain weather patterns, we will continue to seek improved pricing. In addition, we remain committed to returning excess capital to shareholders, and in that regard we are especially pleased that notwithstanding the high level of catastrophe losses we again experienced in 2012, we were able to return more than $2.1 billion to shareholders through dividends and share repurchases.
“This was another year in which unusual severe weather events affected many of our customers, and we remain committed to delivering on our promise of helping them restore their lives. Our entire Claim organization has again been called upon to work under difficult circumstances and has responded with their customary care and professionalism. We are deeply appreciative for all that they have done over these difficult months to make sure Travelers does it right,” concluded Fishman.
Fourth Quarter 2012 Consolidated Results
|($ in millions)||Three Months Ended December 31,|
|Underwriting gain (loss)||$||(338||)||$||187||$||(232||)||$||115|
Underwriting gain (loss) includes :
|Net favorable prior year reserve development||222||126||146||83|
|Catastrophes, net of reinsurance||(1,054||)||(102||)||(689||)||(68||)|
|Net investment income||689||652||556||541|
|Other, including interest expense||(79||)||(75||)||(46||)||(47||)|
|Net realized investment gains||39||14||26||9|
|Income before income taxes||$||311||$||778|
|GAAP combined ratio||105.4||%||95.9||%|
GAAP combined ratio excluding incremental impact of direct to consumer initiative
Impact on GAAP combined ratio
|Net favorable prior year reserve development||(4.0||)||pts||(2.3||)||pts|
|Catastrophes, net of reinsurance||18.7||pts||1.8||pts|